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Honda wields knife on prices

Priced down: The Honda City sedan price has been cut $1000, even though it is imported duty free from Thailand.

More price cuts as Honda swallows five per cent tariff cut a month early

1 Dec 2009

HONDA has joined Mazda in pre-empting the federal government's January 1 five per cent import tariff cut by reducing prices of its Japanese and UK-made cars by between $1500 and $3000.

The company has also sliced $1000 out of City light sedan prices, even though that model – like most of Honda’s biggest sellers in Australia – is imported duty-free from Thailand under the free-trade agreement and therefore will enjoy no cost benefit from the tariff cut.

Honda Australia spokesman Mark Higgins said the City price change, which drops the base VTi manual to $19,490, was designed to bring prices of the light sedan closer to those of rivals.

In October, Mazda chopped prices of its Mazda2 five-door hatch range by up to $600, bringing the manual Mazda2 Neo down to $17,005. As well, the larger Mazda3 Neo sedan and hatch were reduced to $21,330 – a premium of less than $1000 over the previous City sedan pricing.

The new Honda City price not only realigns the price with Mazda rivals but brings it into line with Toyota’s similarly sized Yaris sedan, which starts at $19,530.

In Honda’s round of price cuts, the biggest price slice has been made on the Japanese-made luxury Legend flagship, which drops $3000 to $76,990, while the Odyssey people-mover – also made in Honda’s homeland – comes down $2000, to start at $41,990.

Honda Australia’s biggest selling Japanese car, the Accord Euro, enjoys prices cuts of between $1500 and $2000, with the base Euro manual now starting at $33,490.

While most Honda Civics are made in Thailand and are therefore unchanged in price, two specialty models – the UK-built Civic Type R and five-door Si – are around $2000 cheaper, thanks to the federal tarriff concession.

The sporty three-door Type R is now $39,990 – the price it was launched at in 2007.

Prices of the Thai-built Jazz, Civic sedan, Accord and CR-V are all unchanged. These Thai models account for about 80 per cent of Honda sales volume in Australia.

So far this year, Honda sales are down 25.1 per cent in a market down 11.7 per cent.

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